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Euro continues to fall against dollar

Thursday 19th August 2010
The euro dropped for a second day against the dollar as signs that Europe’s economic recovery is waning damped demand for the single currency.

The euro fell after Germany’s Der Spiegel magazine said Greece’s austerity measures were starting to hurt the economy, causing rising social tensions.

Der Spiegel reported on its website that austerity measures in Greece are dragging down the economy and have driven the unemployment rate to as high as 70 percent in some areas, The International Monetary Fund has forecast Greek joblessness at 12 percent this year and 13 percent in 2011.

Europe’s currency dropped toward a four-week low versus the US dollar in anticipation of a German report that economists said will show growth in producer prices slowed last month. The producer price index rose 0.1 percent in July after gaining 0.6 percent the previous month, according to a Bloomberg News survey.

The yen also slid against the dollar on speculation Japan will weaken the currency and after data showed domestic investors bought a record amount of foreign debt last week. Malaysia’s ringgit rose to a 13-year high as the central bank relaxed currency controls.

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